2020 Market Recap
The 2020 real estate market is over. It’s a wrap, confined to the dust bin of history in just a few short days. And with the start of a new year some 2021 housing market predictions are in order.
The Waterloo Region real estate market saw record prices yet again in 2020. This wasn’t something I’d have bet on in March witnessing the twin impacts of a global pandemic and the fastest stock market drop in history.
But we saw an unparalleled effort from government worldwide. A couple of things that surprised me this year was the amount of money dumped into the global economy and equity markets, and just how low interest rates were pushed. The latter has had a profound effect on house prices this year.
For most of 2020 we saw monthly gains comparable to the crazy spring market of 2017. Tight inventories and unprecedented low interest rates were big market drivers for much of this year. I’ve touched on the topic of low rates before and I think their link to prices is pretty strong.
Working In Real Estate In A Pandemic
My 2020 was like yours, or a variation of it anyway. Our collective experience has been nothing but covid-covid-covid for months on end. No one has escaped it, not even in Antarctica, where there was a recent outbreak among military personnel.
A popular mantra over the past few years is expressing gratitude daily. This isn’t a habit I partake in but maybe this isn’t a bad idea in the face of covid.
I am definitely feeling fortunate that my family has remained healthy. And I got lucky when this first started. A client’s uncle, sick but undiagnosed, visited their house a week before we met up there. The uncle ended up on a ventilator and in hospital for 3 1/2 months.
Since then my family and I have laid low. I’m lucky, again, that I work from home and only go out for essentials and meeting with clients. So much of real estate had moved online even before covid. Aside from showings I very rarely have to interact with clients in person. And I take the same precautions as anyone going to the store these days.
Others aren’t so fortunate. Many people I know are at work in crowded conditions working to keep food on their tables. A client told me that people are getting sick at his factory almost every week.
2021 Housing Market Predictions
And now at year-end, when the housing market quiets for winter, there is light at the end of the tunnel. Billions of dollars in vaccine research has paid off and not a moment too soon. If the forecasting is right we will beat covid by the summer or fall.
I think our nation has done a great job dealing with covid and perhaps an okay job provincially. But the push by all levels of government to social distance, wear masks and vaccinate is the correct one. We need to keep on this path.
At the same time the world’s power brokers will do everything they can to steer us away from recession, as they have done for the past 9 months. As a result my 2021 housing market predictions are quite positive, assuming the economy stays afloat. 2020 proved people aren’t afraid to buy and sell real estate.
Rates should remain at rock bottom lows next year, because any attempt to raise rates will increase everyone’s debt burden and potentially stall out the economy.
And there is a sea of money out there looking to be spent. Housing has offered out-sized returns for the last decade straight. Buyers won’t wait with prices rising 10% plus each year. The happy end of the pandemic will only add to this demand.
Having said all this, I am glad 2020 is over. It’s been a crazy and stressful year. I’m tired of wearing masks, tired of needing to protect myself and tired of not seeing my friends. I am tired of covid. But I don’t want to be the cause of someone else’s death or illness. I can do this for 6 or 9 more months. And you can too. Looking forward to 2021!